American Airlines And US Airways Agree To Extend Merger Agreement - Quick Facts

(RTTNews) - AMR Corporation (AAMRQ.PK), the parent company of American Airlines Inc., and US Airways Group Inc. (LCC) announced Monday that they have each agreed to extend the outside date at which either party may terminate the previously announced Agreement and Plan of Merger, in light of the trial schedule surrounding litigation with U.S. Department of Justice.

They said that the amended Merger Agreement extends the date on which either AMR or US Airways may terminate the Merger Agreement from December 17, 2013 to the later of January 18, 2014, or, if the Court enters an order on or before January 17, 2014 in favor of American and US Airways, on the 15th day following the entry of such order. In the event of an unfavorable ruling by the Court, AMR or US Airways may terminate the merger agreement five days after the Court enters a final, but appealable, order permanently enjoining the merger.

In mid-september 2013, AMR Corp's reorganization plan to exit bankruptcy received approval from a US court. The Judge had concluded the plan was feasible, if allowed to proceed. The legal battle will continue as the company is facing an antitrust lawsuit challenging the proposed merger.

In August 2013, the Department of Justice's Antitrust Division, along with the attorneys general, filed a civil antitrust lawsuit challenging the proposed $11 billion merger between US Airways Group Inc. and American Airlines' parent corporation, AMR Corp.

As per the reorganization plan, if the companies fail to settle this antitrust litigation, the reorganization plan would need to be reconsidered by the bankruptcy court.

In February 2013, American Airlines and US Airways had announced a $11 billion-deal to create the world's largest airline. US Airways shareholders will own 28 percent of the combined company, while the remaining stake will be held by stakeholders of AMR and its debtor subsidiaries.

AMR filed for Chapter 11 bankruptcy protection in November 2011.